Pig producers are making a loss with every pig produced for the first time in two years.
Estimates from AHDB suggest producers are losing up to £8 for every pig produced.
The organisation, which oversees farm levy money spend, said the average cost of production during the first quarter of the year was 146.4p a kilo – 7p higher than average prices received by producers equating to a loss of £5 a pig.
“This is the first time that costs have risen above incomes since the first quarter of 2013, but before that producers were often in a loss-making position,” said AHDB.
“By the end of the quarter, pig prices had fallen still further, pushing losses up towards £8 per head.”
It said production costs in the first quarter were slightly higher than the second half of 2014.
“This was largely attributable to a modest rise in feed prices, although other factors contributed, including the low cull sow price, which increased the effective cost of replacement gilts,” said the levy organisation.
“Nevertheless, costs remained 6p/kg lower than a year earlier and were towards the bottom end of the range experienced in recent years. This has helped limit the impact of falling pig prices on producer margins, for now at least.”